Monday, July 5, 2010

When the interests of investors are at stake, you can always count on GFH to take the same prompt action it always does to make sure they are fully informed. In this case even working over the 4 July holiday!

You'll recall that on 30 June Ted Pretty was quoted in the press that GFH had agreed a rescheduling with the West LB syndicate and that it was in the final stages of documentation.

Today a formal announcement appeared on the Bahrain Stock Exchange. I didn't see announcements on the DFM or the KSE, but then again the 4 July holidays in those jurisdictions may be responsible.

GFH's 1 July reply to the Bahrain Stock Exchange's letter of 30 June apparently was not sufficiently comprehensive and so this additional message apparently was required.

As Ted Pretty has stated previously, there are serious responsibilities for an institution like GFH. Responsibilities matched by GFH's commitment.

"GFH is a flagship institution in Bahrain and the Islamic financial sector and we are committed to working hard to set a better example as a model participant."

And for those who may still be prone to misinterpret this sequence of events, I'll requote the remarks of GFH's Chairman upon the issuance of 1Q10 financials which should set the record straight.

"The Board has taken a very prudent approach in declaring this result and is committed to continuing transparency in the way we do business."

Comforting words indeed. The flag flies high. Despite the fact that Arabic has no capital letters, that is I believe how one spells شفافية with a capital ش .

Another remarkable though ultimately saddening disclosure was the implicit confirmation that GFH has been forced to abandon its "proven business model" for another. As the press release notes, the new maturity on the West LB syndicate will give GFH time to "double its current efforts to transform to a new business model".

Unspoken by GFH was the reason for need for that change.

Here at Suq Al Mal we're not shy about confronting issues and speaking truth to power. And so we'd note that as per the analysis of many experienced market experts (GFH, TID, GIH, a wise Southern Shaykh to name just a handful), it was the global financial crisis. And, as always, we take this most appropriate occasion to point out that this expression is most properly in lower case lest it be confused with any specific institution.